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Diversity and Inclusion MetricsMeasuring what counts

Uxio Malvido

Principal Advisor, Diversity and Inclusion

Rio Tinto

Diversity and Inclusion Academy

Munich, February 2012

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Session outline

PROFITABILITY

Overcoming limitations of correlation studies

REPRESENTATION

Setting meaningful local goals

INCLUSION

Measuring culture change

FLEXIBILITYWORK-LIFE

Showing business value

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Catalyst: The Bottom Line

Profitability studies

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McKinsey: Women Matter

Profitability studies

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EVA Analysis: Female Leadership and Firm Profitability

Profitability studies

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Objective Measure 50% 100% 200% Points

Develop Strong Leaders

Diversity Index 50% 100% 200% 3

Female Representation

(M01-M03)

Baseline: 30,8% (24 F / 78 T)

31,6%(34% -

baseline)/4

32,1%(36% -

baseline)/4

33,1%40% -

baseline)/4

Annual target

Merck

Representation targets

Corporate goal of increasing female representation at the top from 29% to 36% in 4 years)

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Rio Tinto

Representation targets

Corporate goal of increasing female representation in senior management from 14% to 20% by 2015

Reporting Year

Board Executive Committee*

Senior Management (A-E)20% by 2015

Graduates40% F by 201515% DC by 2015

2009 12% or 2 F 20% F or 2 F 13% F 29% F2010 14% F or 2 F 20% F or 2 F 14% F **27% F 8% DC2011 14% F or 2 F 20% F or 2 F 14% F ***25% F

20%DC

*Does not count CEO (18% with CEO)**DC equals country we are developing business in***Graduate goal for 2011 numbers not final—these reflect offers made

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% Exec.

% Managers /

Pipeline

% Workforce

Cascading targets

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% Managers

% Executives

Low High

Low

High Retention Goals

Goals at Executive

level

Goals at Executive and

Mger levels

Cascading targets

Goals at Manager level

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Representation: understanding dynamics

Company Marketplace

Promotion (in)

Promotion (out)

Recruitment

Turnover

+

_

3 2

5 4 +

_

+ 4

Scenario A

0 4

3 0 +

_

- 1

Scenario B

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Inclusion: Measuring culture change

Rio Tinto

Inclusion Index has a strong reliability

Cronbach alpha 0.87

The Inclusion Index has a strong

correlation with engagement

Correlation 0.97

• We are measuring Inclusion through a subset of metrics from the Global Employee Engagement Survey to track perceptions of culture change.

• Data from 2011 will constitute the initial baseline.

#24. Management at Rio Tinto supports diversity and inclusion in the workplace.

#72. Most of the time it is safe to speak up in Rio Tinto.

… and 5 other items

Concept 7 Inclusion Items Statistical Analysis

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Engagement+ 29%

for those employees who

have the flexibility they need

ExpectedTurnover

x2for those

employees who do not have the flexibility they

need

Scorecard - Culture

Retention

Merck – 3 points

Engagement Index

HH – 4 points

HR – 5 points

40% employees not satisfied with

existing opportunities

Women in grades M01-M04 less satisfied group

-

Managers report flexibility is positive to be competitive

(75%)

Managers report flexibility is positive

on customer service (59%)

+

Flexibility: showing the business value